China Manufacturing PMI Misses, Tumbles To 7-Month Low

If there was any doubt that it was also snowing in China this winter, the February Flash HSBC PMI, which tumbled from 49.5 where it was expected to print, to 48.3, a seven month low, just sealed all meteorological conundrums. And with every sub-index decreasing or deteriorating, it is no surprise that headline index tumbled.

At 48.3, this is the lowest since July of last year with the employment sub-index the lowest since Feb 2009.

The commentary from Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC, was about as dire as could be:

“February’s flash reading of the HSBC China Manufacturing PMI moderated further as new orders and production contracted, reflecting the renewed destocking activities. The building-up of disinflationary pressures implies that the underlying momentum for manufacturing growth could be weakening. We believe Beijing policy makers should and can fine-tune policy to keep growth at a steady pace in the coming year.”

Markets are not happy that the dream of a sustainable escape velocity growth miracle is not coming true and for now bad news is bad news (as The Fed's minutes suggested they will - just as Yellen stated and the market ignored - stay the course on the taper). USDJPY and the Nikkei 225 has erased all their post-BoJ gains on this news.

USDJPY and Nikkei 225 have erased all gains post BoJ

S&P futures are also fading fast as they recouple with USDJPY as it tests the critical 102 level... 27 points off today's highs